2017-11-23 / Letters

Cuts don’t increase government revenue, to quote Wikipedia

To the editor:

In a recent letter replying to a letter of mine, Don Sheets made a number of claims about economics. One of the most difficult to believe is the claim that “[i]n each and every case throughout history in the United States…, when tax rates decrease, government revenue increases”. Unfortunately, he supplied no references.

I am not an economist although I did study at the London School of Economics for a year, so I have had to spend some time researching his claim. I learned that it comes from “supply-side”, or “trickle down”, theories of economics. I have also learned that not all contemporary economists agree with that claim.

According to an excellent Wikipedia article titled “Supply-side economics”, Alan Blinder has called it “ill-fated”, and “silly”. Greg Mankiw, who chaired George W. Bush’s Council of Economic Advisors, has also criticized it, saying “Tax cuts rarely pay for themselves”. And in an article titled “Voodoo Curse”, James Tobin said: “Supply-side claims [have] been proven false by experience. The ‘Laffer Curve’ idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981”.

Finally, according to Karl Case and Ray Fair, “The extreme promises of supply-side economics did not materialize. President Reagan argued that…the government could maintain expenditures, cut tax rates, and balance the budget. This was not the case. Government revenues fell sharply from levels that would have been realized without the tax cuts.” (The Wikipedia article contains detailed references for all of these quotes.)

I’m sure Sheets, with a little searching, could find a quote in favor of trickle-down economics. One could also find a quote that says that Trump is the best president ever. It’s important to look to the source.

Barbara Abbott
E. Horn Rd, Lake Leelanau

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Ms. Abbott, you are 100

Ms. Abbott, you are 100 percent correct. The proposed 2017 Republican Tax Bill is nothing more than a gift to the Republican donor class at the expense of all others.